In the Philippines, when a person passes away without leaving a will (intestate) and leaves behind no debts, the heirs are not required to go through a lengthy and expensive court proceeding. Instead, they may opt for an Extrajudicial Settlement of Estate (EJS).

This process is a private agreement among the heirs to divide the properties of the deceased. When a surviving spouse is involved, specific legal considerations regarding property regimes and succession rights come into play.

1. Legal Requisites for Extrajudicial Settlement

Under Rule 74, Section 1 of the Rules of Court, an extrajudicial settlement is valid only if the following conditions are met:

No Will: The decedent died intestate.
No Debts: The estate has no outstanding debts, or all debts have been fully paid.
Heirs are of Age: All heirs are of legal age, or minors are represented by judicial or legal guardians.
Public Instrument: The settlement must be made through a notarized deed (Deed of Extrajudicial Settlement).
Publication: The fact of the settlement must be published in a newspaper of general circulation once a week for three consecutive weeks.

2. The Role and Rights of the Surviving Spouse

The surviving spouse occupies a dual role in the settlement: as a co-owner of the marital property and as a compulsory heir.

Partition of the Conjugal Property

Before the "estate" of the deceased can be divided among the heirs, the marital partnership must be liquidated.

Absolute Community of Property (ACP): Usually for marriages after Aug. 3, 1988.
Conjugal Partnership of Gains (CPG): Usually for marriages prior to Aug. 3, 1988.

Generally, 50% of the marital assets belong to the surviving spouse as their share in the conjugal property. This half is not part of the inheritance; it is the spouse's own property. The remaining 50% constitutes the "Estate of the Deceased."

Successional Rights

Under the Civil Code of the Philippines, the surviving spouse is a compulsory heir. In an intestate settlement:

If children are present, the spouse gets a share equal to that of one legitimate child.
If no children are present but legitimate parents of the deceased survive, the spouse is entitled to one-half of the estate.

3. Essential Documentary Requirements

To successfully register an Extrajudicial Settlement and transfer titles, the following documents are required by the Bureau of Internal Revenue (BIR) and the Register of Deeds:

Mandatory Basic Documents:

Deed of Extrajudicial Settlement of Estate: A notarized document signed by all heirs, including the surviving spouse, detailing the partition of properties.
Certified True Copy of the Death Certificate: Issued by the Philippine Statistics Authority (PSA).
PSA Birth Certificates: Of the children (to prove heirship).
PSA Marriage Certificate: To prove the legal status of the surviving spouse.
Notice of Death: (Note: Under the TRAIN Law, this is no longer strictly required for deaths occurring after Jan 1, 2018, but may be needed for older cases).

For Real Property (Land/Condo):

Certified True Copy of Transfer Certificate of Title (TCT/CCT).
Certified True Copy of the latest Tax Declaration.
Certificate of No Improvement: If the land has no existing structures.

For Personal Property (Vehicles/Shares/Cash):

Certificate of Registration (CR) and Official Receipt (OR): For vehicles.
Stock Certificates: For shares of stock.
Certification from Bank: For bank deposits/accounts.

4. The Process and Tax Compliance

The settlement is not complete upon signing the deed. The estate must undergo the following steps:

Preparation of the Deed: The heirs sign the Deed of Extrajudicial Settlement of Estate and Waiver of Rights (if any heirs are giving up their share).
Payment of Estate Tax: The Estate Tax Return (BIR Form 1801) must be filed. Under the current TRAIN Law, the rate is a flat 6% of the net estate.
Securing the CAR: Once taxes are paid, the BIR issues the Certificate Authorizing Registration (CAR). This is the "golden ticket" required to transfer ownership.
Publication: The affidavit of publication from the newspaper publisher must be secured.
Transfer of Title: Present the CAR, the Deed, and the Affidavit of Publication to the Register of Deeds to issue new titles in the names of the heirs.

5. Important Considerations

Bond Requirement: If the estate includes only personal property and is settled extrajudicially, the law requires a bond to be filed with the Register of Deeds. For real property, a legal lien is inscribed on the back of the new title for two years to protect potential creditors or excluded heirs.
Waiver of Rights: If the surviving spouse or children wish to give their share to a specific person, they must execute a "Waiver of Rights" within the same Deed. Be aware that a "renunciation" in favor of a specific individual is considered a Donation and may be subject to Donor's Tax in addition to Estate Tax.
Disagreement Among Heirs: If the spouse and the children cannot agree on how to divide the property, an extrajudicial settlement is impossible, and they must resort to an Ordinary Action for Partition in court.